According to the U.S Department of Commerce‡, consumer spending fell 13.6% with the savings rate up nearly 33% due to COVID-19–an some of that decreased spending was on common expenses we may not even think twice about.
As economies and communities slowly start to plan reopening, this presents a chance for you to either transition back to spending—or see if there are a few expenses you can keep out of your budget. By reallocating a few common expenses, you might be able to hit a financial goal sooner than you thought.
Caffeine fix savings
According to MSN‡, the average American spends $1,100 a year on coffee. That’s nearly $92 a month. Learning how to make your own fancy coffee drink at home was a trend that emerged in April, with morning news shows offering demos for making the perfect whipped coffee‡ in your kitchen.
What you’ve saved from making coffee at home could help you allocate some dollars to savings or paying down debt. And, you may have saved enough to warrant buying a new coffee machine so you can continue the at-home barista routine and the savings.
The average family spends more than $800 a month on childcare according to the Economic Policy Institute‡. Once stay-at-home orders went in place, many families decided to keep their kids home to lower exposure risk to the COVID-19 virus. For some households, this presented an opportunity to save money with paused or lowered childcare costs.
If you were able to keep your children home the past few months, the savings could be used to start a 529 plan for your child, or more funds to cover your necessary expenses.
Commuting and flying
Most Americans spend around $58 a month on gas according to Business Insider‡, but due to the pandemic, oil prices turned negative as people stopped commuting and air travel dropped significantly. Additionally, some auto insurance agencies started issuing refunds to account for the reduced time spent driving.
If you’ve saved some money on gas and travel expenses, you might consider starting a savings fund for a new car, car maintenance costs, or paying off a current car loan.
The entertainment industry could lose about $12 billion in revenue according to Forbes‡ because of the stay-at-home orders. With museums closed, theaters unable to seat large crowds and concerts and festivals cancelled for the coming months, Americans are savings thousands of dollars—even if it isn’t a savings made with enthusiasm.
Now might be a great time for families to explore free resources to explore the world and watch concerts online. You can also consider using these funds to donate to your favorite nonprofit entertainment venue like your local theater. Finally, artists who would otherwise be at festivals this summer might also have expanded websites you can explore to buy or access their work.
New opportunities to save
With all the savings from the past three months adding up, now is the time to explore the best options to save, invest or donate your money. Take a few minutes as a family to determine what common expenses can stay out of the budget as your community starts to reopen, and where those saved dollars could be used to help you achieve other important goals.
UMB personal banking solutions offer convenience and simplicity to meet all your financial needs. From home loans to auto financing and everything in between, see how UMB personal banking can work with you to find the right products for your life and lifestyle.
Boost your financial know-how and sign up for our personal banking newsletter. We’ll send informative articles right to your inbox.
When you click links marked with the “‡” symbol, you will leave UMB’s website and go to websites that are not controlled by or affiliated with UMB. We have provided these links for your convenience. However, we do not endorse or guarantee any products or services you may view on other sites. Other websites may not follow the same privacy policies and security procedures that UMB does, so please review their policies and procedures carefully.